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About Microfinance

  • Vision Microfinance helps others to help themselves and has a dual return: it gives low-income, but economically active people the chance, to break free from poverty thanks to their own virility. In addition, investors profit from a series of advantages.

  • Vision Microfinance is addressed to low-income people who lack the financial means to realise their entrepreneurial ideas. The purchase of a sewing machine for example provides a loophole out of poverty for a tailor. In some countries Vision Microfinance is used by women in particular which enables them to gain a better standing in their family and in society. People who are not able to become economically active require other instruments of development politics.

  • A Microfinance Institution (MFI) is an organisation that provides financial services for MSME - Micro- Small and Medium Enterprises. They are operating in emerging and frontier markets and can vary in size and their field of activity. These institutions often start out as non-governmental organizations (NGOs) which only focus on the extension of credit and transform over time into regular banks that offer the usual spectrum of financial services.

    Due to the fact that micro-entrepreneurs often lack traditional collateral it is necessary to conduct an in-depth analysis of their personal living conditions and that MFI are in close contact with micro-clients. As a result, microfinance institutions know their clients very well, meet them on a regular basis and support and advise them in their daily lives.

    Another common approach is to lend to a small group of clients where all members are jointly liable. Thus, there is an incentive to supervise and help each other which leads to high repayment rates that are usually in the range of remarkable 96-98%.

  • Micro-credits are small loans with a big impact. They are based on the principle of trust and individual responsibility. However, you should not confuse micro-credit with charity. They are interest-bearing debt and need to be repaid on time. They offer the following characteristics:

    • Small loan sum
    • Short time to maturity
    • Interest and amortisation take place in small but frequent rates
    • Strong customer focus, regular contact of MFIs with clients
    • Good knowledge and in-depth analysis of personal living conditions instead of traditional collateral
  • The interest rates for a microcredit are 2–3% per month. These conditions are very attractive to micro entrepreneurs as local money lenders charge usurious interest of up to several hundred percent per month.

    The interest rates consist of the following components:
    Of the assumed 25% interest rate p.a. which a micro-entrepreneur has to pay to the microfinance institution, the MFI requires 15% in order to cover all costs and be profitable. The remaining 4-6% interest is used to cover costs for borrowing capital which is made available from microfinance funds for example. In this case, an investor can expect a target return of 2-3%.

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  • Theoretically, Vision Microfinance can invest in any country in the world. The focus, however, is on emerging markets in Latin America, Eastern Europe and Asia.

  • 1.26 bn USD have been distributed in the form of micro credits to 267 different MFIs in 62 countries in form of 940 promissory notes which have helped more than one million people to a better future. Vision Microfinance enables - amongst others - access to food, to medical supplies and to education for the children. Success stories of micro-entrepreneurs you can look up in Research >>.

  • Vision Microfinance hands out direct loans to microfinance institutions (MFIs) in developing countries. All transactions before, during and after a loan agreement are checked thoroughly and are absolutely transparent. All contracts for example are deposited with the investment manager, C-QUADRAT Asset Management GmbH in Vienna, and the depositary bank, UBS Luxembourg S.A.

    MFIs, in return, hand out micro credits to low-income, but economically active people. Naturally, all transactions are controlled in detail, MFIs are visited on-site and their social performance is assessed. This is why you can be sure that your investment is not dissipated but helps a multitude of micro-entrepreneurs.

  • Vision Microfinance provides micro-entrepreneurs access to sustainable financial services, to establish a living and to create a future with encouraging prospects. Microfinance institutions (MFIs) provide micro-loans to people who are excluded from the traditional financial sector. Local microfinance institutions are subject to strict auditing to ensure social objectives and requirements are met.

    All contracts for example are deposited with the investment manager, C-QUADRAT Asset Management GmbH in Vienna, and the depositary bank, UBS Luxembourg S.A. In 2011 the company was awarded with the "ESG Transparency Certificate" by CGAP (Consultative Group to Assist the Poor) for the transparency to the clients.

    MFIs, in return, hand out micro credits to low-income, but economically active people. Naturally, all transactions are controlled in detail, MFIs are visited on-site and their social performance is assessed. This is why you can be sure that your investment is not dissipated but helps a multitude of micro-entrepreneurs.

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  • The time period from the identification of investment opportunities until the disbursement of funds usually takes between two to four months. The portfolio manager manages the composition of the fund and thereby needs take into account the diversification across regions, countries and institutions. The investment process consists of a top-down approach on the country level (analysis of political situation, the legal structures, common interest rates etc.) as well as a bottom-up approach on the MFI level.

    A preselection of adequate MFIs is already done by the research agent Symbiotics SA in Geneva. The Swiss company is a specialist in microfinance research and enjoys a very good reputation in the industry. Symbiotic’s employees work in offices in four different continents and cooperate with MFIs on the ground. In order to get important insights into the financial and social situation within the MFI a thorough and strict due diligence process (DD) has been established. This DD provides the basis for the selection of investable and high-quality institutes of C-QUADRAT Asset Management. The analysis contains quantitative as well as qualitative criteria. Important question are e.g. How long is the MFI operating? Does the management have the expertise and experience necessary to lead the MFI? What are the social goals of the company with regard to clients and employees? How does the client structure look like? What are the conditions of the deal and how is the money lent to micro-clients?

    There is a constant assessment of the financial and social figures of the MFIs which is possible due to the continuous and contractual agreed upon monitoring and reporting of the MFIs to Symbiotics.

    Symbiotics offers extensive information via its platform to C-QUADRAT Asset Management. The analysts of the research company usually stay on average two week in the respective country and meet MFIs and at random the MFIs’ clients. During the client visits intensive interviews are conducted to better measure the social performance of the microfinance institute. C-QUADRAT Asset Management receives client visit reports which are usually more than 30 pages long. In addition, each MFI has to report on a monthly basis about their operative, financial and social developments.

  • Microfinance institutions (MFIs) offer an additional security component. They are on-site in emerging markets and check the living circumstances of the micro-entrepreneurs thoroughly before a loan is approved. MFIs have a very close contact with their clients, they visit them regularly and offer trainings and further education alongside microfinance products. Besides, the administrative burden of a direct issuing of loans by the fund to micro-entrepreneurs would be impossible.

Microfinance Products

  • Austria: The investment fund units of both Dual Return Funds may only be distributed to professional and semi-professional investors in Austria. Distribution to retail clients is not permitted.

    Luxembourg & Germany: The investment fund units of both Dual Return Funds are registered for public sale in Luxembourg and Germany.

    Both Microfinance Certificates - the AIV Vision Microfinance Certificate (XS0554544428) and the AIV Vision Microfinance Local Currency Certificate (XS0554549575) - are registered for public sale in Austria as well as in Germany. Especially sustainable funds and products gain from the certificates as they enable a simplified way to invest in the Microfinance asset-class.

  • The investment fund units can be aquired from all banks and the biggest platforms in Austria and Germany. In addition, there are distribution agreements with individual institutions.

  • Subscription of fund units: monhtly , cut-off 17:00 CET, till 24th of a month, settlement with NAV of 25th of the same month, value date: NAV + 2-4 business days

    Redemption of fund units: monthly, cut-off 17:00 CET, till 10th business day of a month, settlement with NAV of 25th of the following month, value date: NAV + 10 business days

    Subscription and redemption of certificates: please contact directly the calculation agent Oaklet GmbH in Frankfurt:
    Phone: +49 (69) 7680 585 0
    Email: info@oaklet.de
    www.oaklet.de

  • The NAV is valuated and published twice a month, on 10th and 25th of the month.

    Certificates: Please find the published valuation data on the website of the calculation agent Okalet Gmbh, www.oaklet.de/de/kursversorgung.

  • Experience has shown that an impressive 98% of micro-entrepreneurs are able to pay back their micro-credits in time and with interest. Micro-entrepreneurs appreciate the often unique chance a micro-credit offers and strive hard to repay the credit. An added incentive is the fact that punctual repayment is a prerequisite for obtaining a further credit.

    Often micro-credits are handed out to a group of people whose members are solidly liable for the repayment. If an individual does not pay back the credit, he/she would lose face. The strong social structure in developing countries and the regular visits by the microfinance institutions are further reasons for the high repayment ratio.

  • Currency risks are hedged completly in the Dual Return Fund - Vision Microfinance.

    However, in the Dual Return Fund - Vision Microfinance Local Currency solely the EUR and CHF share classes are hedged against the fund currency USD.

  • Generally, when choosing an institute a strict selection process is conducte (see also “Which investment process pursues C-QUADRAT Asset Management for selecting the MFIs?) Should nevertheless a MFI delay its payments, a corresponding provision will be made until the insolvency of the company is confirmed. Since the inception of the fund (April 2006) until now, 940 loans (as of 10/2018) to MFIs have been granted and only two institutes were unable to repay the debt – 99% of all credit has been paid in full and on time.

  • Private investors can take part in Vision Microfinance with a minimum investment amount of 1,000 Euro / institutional investors with 125,000 Euro. Please contact your financial adivser or your local banking branch for an investment. Also, please don't hesitate to contact us if you have any queries.

  • "To invest. And to do good" – This is the core of all activities of Vision Microfinance. Vision Microfinance endorses the „Smart Campaign“, an intitiative for client protection within the microfinance industry. The campaign is working to establish standards for the appropriate treatment of low-income clients such as transparent pricing, mechanisms for redress of grievances, privacy of client data, ethical staff behavior, appropriate collections practices etc. You can read more on our engagament in Memberships & Seals >>.

Company

  • C-QUADRAT Asset Management GmbH took the initiative in 2006 and founded the first Microfinance Fund "Vision Microfinance" under the umbrella brand of "Vision Micrfinance". The fund is managed by C-QUADRAT Asset Management in Vienna. The Microfinance team is consisting of Dr. Arman Vardanyan, Head of Microfinance, an Armenian long-term asset manager, author of many research papers on emerging markets and developing countries, and Mag. Christoph Eckart, Senior Portfolio Manager. The Swiss company Symbiotics SA is the research agent.

    Vision Microfinance provides micro-entrepreneurs access to sustainable financial services, to establish a living and to create a future with encouraging prospects. Microfinance institutions (MFIs) provide micro-loans to people who are excluded from the traditional financial sector. Local microfinance institutions are subject to strict auditing to ensure social objectives and requirements are met.

    The second Microfinance fund "Dual Return Fund - Vision Microfinance Local Currency" was launched in autumn 2010, which provides micro-loans to MFIs in local currencies.

  • C-QUADRAT Asset Management GmbH former Absolute Portfolio Management GmbH is a leading independent asset management company in the German speaking region, which is specialized in asset allocation, analysis and management of absolute return and sustainable investments.

    The aim of all products is continuous capital growth but with a focus on security and risk minimisation. In rising markets the focus is on performance optimisation. In falling markets the focus is on active risk management in order to protect the consigned assets from heavy losses.

    The company was founded in April 2006 from the asset management division of Vienna Portfolio Management Inc. Since September 2012, the C-QUADRAT Investment AG is majority shareholder of C-QUADRAT Asset Management. The office and management of the company are located in Vienna. The business focus is on institutional clients and high net worth individuals. Our goal is to increase our customer base in close collaboration with banks, online businesses and distributors and to expand into new markets in the coming years.

  • Dr. Arman Vardanyan, Head of the Microfinance-Team and Senior Portfolio Manager of the Dual Return Funds - Vision Microfinance, has more than 15 years of experience in the fincinal markets sector and risk management.

    Mag. Christoph Eckart, Senior Portfolio Manager of the Dual Return Funds - Vision Microfinance and before he gets employed for C-QUADRAT Asset Management in 2010, he was working in Great Britain, Malta and France. Microfinance Due Diligence travels leads him to South-, Middle- and North America, Central- and South Asia and in the Caucasus region.